71,000 jobs boost in warmer homes scheme

Energy consumers will pay an additional £4 billion each year in carbon taxes through their energy bills by 2020. But a new study shows that re-investing our carbon taxes in home insulation is a cost effective job creator, cuts energy bills and boosts the economy. Over six million UK households suffer from “fuel poverty”, set to exceed 9 million as energy prices go up. Yet re-investing carbon taxes would create 71,000 green jobs in 2015, treating over 1m homes a year and cutting energy bills by over £230.

This graph (from the study) shows the revenue raised in the UK through auctioned EU Emissions Trading System (ETS) allowances and the carbon floor price (ie carbon tax): an accumulated £63.1bn by 2027 (2008 prices).

The current Chancellor sees this as a new tax. But the Consumer Focus report, Jobs, growth and warmer homes,shows that investing in energy efficiency has other advantages over alternative options. It is fast to mobilise, and would stimulate economic activity and jobs in all regions of the UK. It employs workers in construction and related sectors, which have been hit hard by the recession. There is a direct and immediate stimulus effect to the construction sector and its associated supply chains. Consequently, this sort of investment is less likely than other forms of investment to ‘crowd out’ alternate economic activity. It would also reduce NHS expenditure on treating cold-related illnesses such as respiratory and coronary diseases and reduce dependency on imported gas.

From next year the main scheme to help fuel poor consumers will be the heating and insulation improvements provided by energy firms through the Energy Company Obligation (ECO). But Government estimates show this will lift only 250,000 households out of fuel poverty, at most.

A coalition of business, trade union and environmental organisations support the Energy Bill Revolution campaign, which is behind the study. The EBR argues that it is far preferable to frontload investment in home insulation, so spending almost 95% of the £2.8bn in carbon taxes in 2015 has these benefits:

Generates up to 71,000 jobs.

Boosts GDP by 0.2 per cent or £3.5 billion in 2015.

Lifts nine out of ten households out of fuel poverty.

Cuts bills in all treated homes by at least £200 per year.

Cuts carbon emissions by 1.1%.

To date, 155 MPs have signed up to the campaign. The Energy Bill Revolution is a movement of people and organisations committed to ensuring warm homes and lower bills for all. It includes children’s and older people’s charities, health and disability groups, environment groups, consumer groups, trade unions, businesses, politicians and public figures.

The next phase of the campaign includes over 40 public meetings in towns and cities across the UK. They want a major increase in the number individuals signing the online petition to their MP, and ultimately, to far more MPs coming on board.

Ed Matthew, Campaign Director of the Energy Bill Revolution argues that, “There is enough carbon tax to end fuel poverty and in time help make every UK home super energy efficient.”

Written by Philip Pearson

Philip is a former Senior Policy Officer in the TUC’s Economic & Social Affairs Department, working on issues around climate change, energy and transport.